Question

In: Operations Management

Express Auto, an automobile mega- dealership with more than 600 employees that represents 22 brands has...

Express Auto, an automobile mega- dealership with more than 600 employees that represents 22 brands has received a very discouraging set of survey results. Customer satisfaction scores have fallen for the ninth straight quarter. Customer complaints include:

  • It was hard to get prompt feedback from mechanics by phone.
  • Salespeople often did not return phone calls.
  • The finance people seemed “pushy”.
  • New cars were often not properly cleaned or had minor items that needed immediate repair or adjustment.
  • Cars often had to be returned to have repair work redone.

The table given below describes Express Auto’s current compensation system.

Express Auto Team

Responsibility of Team

Current Compensation Method

1.Sales force

Persuade buyer to purchase a car.

Very small salary (minimum wage) with commissions.

Commission rate increases with every 20 cars sold per month

2. Finance office

Help close the sale; persuade customer to use company finance plan.

Salary, plus bonus for each $10,000 financed with the company.

3. Detailing

Inspect cars delivered from factory, clean and make minor adjustments.

Piecework paid on the number of cars detailed per day.

4. Mechanics

Provide factory warranty service, maintained and repair.

Small hourly wage, plus bonus based on (1 )number of cars completed per day and (2) finishing each car faster than the standard estimated time o repair.

5. Receptionist/ phone service personnel.

Primary liaison between customer and sales force, finances and mechanics.

Minimum wage.

What recommendations would you make to improve the compensation system in a way that would likely improve customer satisfaction?

Solutions

Expert Solution

Express Auto Team Responsibility of Team Current Compensation Method modified compensation method
1.Sales force Persuade buyer to purchase a car. Very small salary (minimum wage) with commissions. Base Salary increase by 15%
Commission rate increases with every 20 cars sold per month Commission Rate increases with every 10 cars sold per month
2. Finance office Help close the sale; persuade customer to use company finance plan. Salary, plus bonus for each $10,000 financed with the company. Salary, plus bonus for each $10,000 financed with the company.
3. Detailing Inspect cars delivered from factory, clean and make minor adjustments. Piecework paid on the number of cars detailed per day. Piecework paid on the number of cars detailed per day.
4. Mechanics Provide factory warranty service, maintained and repair. Small hourly wage, plus bonus based on (1 )number of cars completed per day and (2) finishing each car faster than the standard estimated time o repair. Small hourly wage, plus bonus based on (1 )number of cars completed per day and (2) finishing each car faster than the standard estimated time o repair.
5. Receptionist/ phone service personnel. Primary liaison between customer and sales force, finances and mechanics. Minimum wage. minimum wage

Related Solutions

An auto dealership is attempting to determine the preferences of its customers. The dealership has employed...
An auto dealership is attempting to determine the preferences of its customers. The dealership has employed your marketing research firm to determine the specific features of automobiles most desired by prospective customers. Discuss how you will construct a scale to achieve that objective.
Farmer Fred owns a dairy farm with 22 employees. The state passed a law which requires all employers with more than 15 employees to provide health insurance for the employees.
Farmer Fred owns a dairy farm with 22 employees. The state passed a law which requires all employers with more than 15 employees to provide health insurance for the employees. To avoid this requirement, Fred sets up two corporations, each with 11 employees. Fred is the controlling shareholder and Chief Executive Officer of each corporation, and freely transfers money between the two corporations on an “as needed” basis. The state sues Fred personally for failing to comply with the law...
One researcher was disturbed by the tendency for female employees to overtime more than male employees....
One researcher was disturbed by the tendency for female employees to overtime more than male employees. For this he took a sample of 12 female employees and 10 male employees. The table below is data on how many hours were spent overtime a week. Using a non-parametric test and a 95% confidence level, can it be concluded that female employees are overtime more than male employees? Female (hour) Male (hour) 13 10 17 6 14 8 12 10 10 12...
Test, at the 1% level of significance, whether the average business has more than 15 employees....
Test, at the 1% level of significance, whether the average business has more than 15 employees. Employees 14 17 17 6 8 17 21 16 6 17 11 17 15 16 20 19 6 12 17 22 20 17 11 11 9 22 17 18 21 20 26 7 16 19 18 11 21 17 25 16 22 14 14 16 18 20 21 11 19 13 6 11 19 14 18 31 13 15 17 21 10 20 21...
An executive believes that no more than 78% of the company’s employees take all of their...
An executive believes that no more than 78% of the company’s employees take all of their vacation days. In a sample of 193 members, 143 employees took all of their vacation days. When testing the executive's hypothesis (using a 1% level of significance), what is the test statistic? (please round your answer to 2 decimal places) An executive believes that no more than 80% of the company’s employees take all of their vacation days. In a sample of 190 members,...
A regulatory agency suspected that more than 10% of all cars of a certain automobile model...
A regulatory agency suspected that more than 10% of all cars of a certain automobile model are unsafe. A random sample of 16 cars finds that 6 of these sampled cars are unsafe. (a) Test the appropriate hypotheses, keeping the significance level at no more than 0.05. Give your decision rule, test statistic value, p-value, and conclusion. (b) What is a 90% confidence interval for the true proportion of unsafe cars in the population?
i want an article on Auto INSURANCE in US more than 1200 words . be creative...
i want an article on Auto INSURANCE in US more than 1200 words . be creative and include lots on insurance key words just my own idea: Major player; compare them (pros and cons); how they work, recommendation, kind of deal offered/ best deals you can go with my idea or go with you ideas. key word and contents are very important please.
Write this in your own words, using no more than 100 words: Express how the durability...
Write this in your own words, using no more than 100 words: Express how the durability of a concrete mixture is affected by the: Water to Cement Ratio Cathodic Protection Permeability Curing Process Explain the advantages and disadvantages
Costco Wholesale Corporation operates more than 600 warehouse stores in the United States and abroad. The...
Costco Wholesale Corporation operates more than 600 warehouse stores in the United States and abroad. The following items were in a slightly simplified version of the company’s statement of cash flows for the fiscal year ending August 28,2011 (in millions): Increase in merchandise inventories $ 642 Net income 1,542 Depreciation and amortization 855 Other noncash expenses 269 Increase in payables 804 Increase in other operating liabilities, net    451 Increase in receivables 81 The company’s income statement showed (in millions):...
Henry Ford paid the workers in his automobile assembly plant more than most employers at the...
Henry Ford paid the workers in his automobile assembly plant more than most employers at the time. He also took an interest in their well-being outside of work. Agents helped workers organize their homes, manage their debt, and buy homes. How did Ford’s approach to employee relations impact employees? Do you think it was to their advantage or disadvantage for the company to take such an active interest in their lives? If you were running a company, what practices of...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT